§ 16-51. Excess benefit plan.

(a)

Establishment of plan. There is hereby created a separate, unfunded, nonqualified excess benefit plan containing the terms and provisions set forth in this subpart and intended to be a qualified governmental excess benefit arrangement as defined in section 415(m)(3) of the Internal Revenue Code.

(b)

Definitions.

(1)

All definitions prescribed in this chapter are applicable to the plan created pursuant to this subpart unless a different definition is set forth in this subpart, or the context in which a term is used in this subpart indicates a different meaning than that prescribed elsewhere in this Code or the Internal Revenue Code.

(2)

Board shall mean the board of trustees of the City of Lake Worth General Employees Retirement System.

(3)

Code shall mean the Internal Revenue Code as it may be amended by Congress from time to time.

(4)

Excess benefit participant shall mean any member whose retirement benefit is determined on the basis of all qualified plans maintained by the city without regard to the limitations set forth in the pension plan and comparable provisions of other qualified plans of the city, that exceed the maximum benefit under section 415 of the Internal Revenue Code.

(5)

Excess benefit plan shall mean the unfunded, nonqualified plan created by the city to provide benefits to members which would be provided under the pension plan, but for the limitations imposed by section 415 of the Internal Revenue Code.

(6)

Maximum benefit shall mean the retirement benefit a member is entitled to receive from the benefit plan set forth in this Code in any month after giving effect to any provision of a qualified plan designed to conform to section 415 of the Code.

(7)

Pension plan shall mean the city general employees retirement system.

(8)

Unrestricted benefit shall mean the monthly retirement benefit a member, or the spouse, child, or other beneficiary of a member, would have received under the terms of all qualified plans of the city, except for the restrictions contained in the pension plan and any similar provisions of any other qualified plans designed to conform to section 415 of the Internal Revenue Code.

(c)

Benefit provided.

(1)

An excess benefit participant who is receiving benefits from the pension plan is entitled to a monthly benefit, including cost of living adjustments, under this excess benefit plan in an amount equal to the lesser of:

a.

The member's unrestricted benefit under the qualified defined benefit plan, less the maximum benefit permitted for qualified defined benefit plans for government employees under section 415, Internal Revenue Code; or

b.

The amount which the member's monthly benefit from the pension plan has been reduced due to limitations imposed by the Internal Revenue Code.

(2)

A retirement benefit payable under this excess benefit plan shall be paid in the form and at the time it would have been paid as a monthly pension under the pension plan, except for the limitations set forth in the pension plan and section 415 of the Code. Each optional benefit form permitted under this excess benefit plan shall be the actuarial equivalent of each other permitted benefit form.

(3)

This excess benefit plan shall be administered by the board. Except as provided to the contrary in this subsection, the rights, duties and responsibilities of the board shall be the same for this excess benefit plan as for any other qualified plan under its direction.

(4)

The actuary employed by the board is responsible for determining the amount of benefits that may not be provided under the pension plan solely by reason of the limitations set forth in this section and section 415 of the Internal Revenue Code and shall also determine the amount of contributions that will be made to the excess benefit plan rather than to the pension plan.

(5)

The actuaries and legal advisors for the board shall also provide advice to the board for this excess benefit plan.

(d)

Contributions. Contributions may not be accumulated under this excess benefit plan to pay future retirement benefits. Each payment of contributions by the employer that would otherwise have been made to the retirement system shall be reduced by the amount determined by the board as necessary to meet the requirements for retirement benefits under this excess benefit plan until the next payment of contributions is expected to be made to the pension plan by the city. The city shall then pay to this excess benefit plan, out of the contributions that would otherwise have been made to the pension plan, on at least a quarterly basis, as set forth in the grantor trust agreement creating the excess benefit plan, an amount necessary to satisfy the obligation to pay monthly retirement benefits under this excess benefit plan. The board shall satisfy the obligation of this excess benefit plan to pay retirement benefits out of city contributions so transferred. The city contributions otherwise required to the pension plan established under the retirement system and under other qualified plans shall be divided into those contributions required to pay retirement benefits pursuant to this section and those contributions paid into and accumulated to pay the maximum benefits required under the qualified plans. City contributions made to provide retirement benefits pursuant to this part shall not be commingled with monies of the pension plan or any other qualified plan, nor shall this excess benefit plan ever receive a transfer of assets from the pension plan. Any actuarial gains realized as a result of the limitation of benefits shall be a direct credit to the city.

(Ord. No. 2003-12, § 4, 3-3-03)